A Tea Partier's prescription for a slow economy is...wait for it....stimulus spending bythe government. But, strangely enough, only defense spending is acceptable. Let's spend $9 billion on an aircraft carrier we don't need but nothing for infrastructure investments we do need. This is an example of why these folks should not be taken seriously.

Friday, August 05, 2011

Here's the story. The rich are really getting richer while the burden of deficit reduction is falling on the middle class. The argument for keeping tax rates low is that low rates boost the economy. But our actual experience is that the accumulation of wealth at the high simply doesn't do that. The problem with the economy is the lack of demand. When more people have money to spend, demand will go up. When there is mild inflation instead of deflation, immediate spending is encouraged. Before the tax cuts, both the economy and the rich were doing fine. A properly fashioned tax code would encourage those with accumulating wealth to spend it where it can do some good instead of just sitting on it.

Rick Perry claims that his Republican policies have produced job growth in Texas. Actually unemployment is just as bad there as elsewhere. The jobs being created are low-wage jobs without benefits. Meanwhile the numbers of homeless continue to climb and schools crumble for lack of funding.

Ezra Klein argues that the Democrats have an opportunity to turn the tables on Republicans. The pending expiration of the Bush tax cuts can be used as a hostage against them. If they choose to not participate in genuine tax reform then we can just let the cuts expire. In Ezra's words:

Just as Republicans planted a trigger for 2011 that ensures spending cuts, Democrats should use the Bush tax cuts as a trigger in 2012 to force revenues. Which is not to say they should campaign for raising taxes. They should campaign against an outdated, inefficient, unfair tax code as well as the Washington way of leaving hard problems for somebody else to handle.

The White House should announce that it won’t extend any of the Bush tax cuts and will instead insist on a Gang-of-Six-esque plan that cleans the code, lowers rates for everyone, and raises $2 trillion or more in revenue. If the GOP refuses, the tax cuts will expire, our revenue problems will be solved, and Republicans will suddenly find themselves much more interested in tax reform. Sometimes, to govern like a Democrat, you need to negotiate like a Republican.

Could we control global warming by salting the ocean with iron? It seems that part of the ice age cycle involved dust storms that increased the iron content in sea water. In turn that caused the plankton to bloom and increase oceanic uptake of carbon thereby cooling the planet.

Once again Krugman points out how the high spending per GDP statistic is misused to criticize Obama. Obama has not expanded spending. It's the GDP that has dropped resulting in the scary statistic. We should be asking why the GDP has dropped. Those reasons include Ponzi games played by our big bankers and the concentration of wealth in the hands of those who can afford not to spend it.

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In this world there are only two tragedies. One is not getting what one wants, and the other is getting it.--Oscar Wilde

In our every deliberation, we must consider the impact of our decisions on the next seven generations. --Iroquois Confederacy Maxim

Focusing your life solely on making a buck shows a certain poverty of ambition. It asks too little of yourself. Because it's only when you hitch your wagon to something larger than yourself that you realize your true potential. --Barack Obama

Change will not come if we wait for some other person or some other time. We are the ones we've been waiting for. --Barack Obama

Countless lives were saved when I decided not to become a nurse. --Mildred Walton

The secret to a long marriage is to take care of your health.--Mildred Walton